|Posted:||December 14, 2012 04:13 PM|
|From:||Senator Patrick M. Browne and Sen. Mike Brubaker, Sen. Dominic Pileggi, Sen. Joseph B. Scarnati, III, Sen. Jake Corman|
|To:||All Senate members|
|Subject:||Defined Contribution Pension Legislation|
|In the near future, we intend to re-introduce legislation, Senate Bill 1540 from the 2011-12 session, that would move Pennsylvania from a defined benefit (DB) pension plan to a defined contribution (DC) retirement plan for all new employees, similar to a 401(k) or 403(b) plan. Key points of this legislation are:
The Legislature needs to make significant policy decisions regarding Pennsylvania’s pension system in the near future. When we compare state benefits to private sector benefits, it is evident that the private-sector is seeking predictability in the funding of their benefits and pursuing cost reductions on a regular basis. Without significant changes in the design of Pennsylvania’s pension system, including a switch to a defined contribution system, the costs associated with the pension system in the long-run will be unaffordable to Pennsylvania taxpayers. Over the past few decades, the private sector has shifted to defined contribution plans. In addition, the federal government had made a similar change. It is time for Pennsylvania to do the same.
A switch to a defined contribution plan would benefit Pennsylvania taxpayers by eliminating future pension crises, retiree benefits will become predictable and sustainable, costs will be easily defined, and future liabilities will be fully funded.
Previous cosponsors of Senate Bill 1540 included: BROWNE, PILEGGI, CORMAN, BRUBAKER, McILHINNEY, FOLMER, FONTANA, ARGALL, YAW, TOMLINSON, BAKER, ERICKSON, EICHELBERGER, D. WHITE, SMUCKER, GREENLEAF, ALLOWAY, RAFFERTY, WAUGH, WARD AND MENSCH
Introduced as SB2